Faxon Company, which has only one product, has provided the following data concerning its most recent month of operations:
-What is the net operating income for the month under absorption costing?
A) $11,600
B) $2,300
C) $(600)
D) $9,300

Question

Faxon Company, which has only one product, has provided the following data concerning its most recent month of operations: 
-What is the net operating income for the month under absorption costing?
A) $11,600 
B) $2,300 
C) $(600) 
D) $9,300

Quizplus · Accepted Answer

Absorption costing includes all manufacturing costs (fixed and variable) in the cost of a product. The net operating income under absorption costing is calculated by subtracting total expenses from total revenues, which results in $11,600.

Faxon Company, Which Has Only One Product, Has Provided the Following